Historically, this data series trended downwards in the beginning of a bear market & economic recession. This suggests that the stock market’s recent decline is a correction and not the start of a bear market.

In the past, Capacity Utilization trended sideways or downwards before bear markets and recessions began. This is because as the economy becomes “as good as it gets”, industry has excess supply and rising inventories, so it no longer needs to expand capacity utilization.

1 am: Consumer Confidence is extremely high right now. A sign of late-cycle behavior.

Consumer Confidence remains very high right now.

(Click on image to enlarge)

You can see that Consumer Confidence was this high from 1967 – 1968 and 1997 – 2000. While this isn’t a timing indicator (it doesn’t tell you when the bull market will top), it does tell you that the bull market doesn’t have many years left. This is a late-cycle sign.

1 am: Unit profits are down: this equities bull market doesn’t have a lot of years left.